Free Essay Discussing External Factors Influencing International Business

The macro-environment refers to economic, demographic, technological factors, political, socio-cultural, and ecological factors that affect the development and consolidation of any organization. The administration of marketing in organizations is conditioned by their external factors or macro-environment (Barkauskas, Barkauskiene & Jasinskas, 2015). To realize the importance and the close relationship of the external environment in the international trade, organizations must identify the trends that arise in the field of businesses in both local and international trading blocks. Every organization must consider the above factors because have an impact, either negative or positive. Organizations are open systems, directly related to their environment or the macro environment; any organization, be it a bank, a non-governmental institution, an airline, a museum or a commercial company, are linked to what happens abroad (Barkauskas et al., 2015). This paper covers the external factors affecting international trade, analyzing how each affects the trade patterns and trends.

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Economic Factors

The economic factors include all those variables, both internal and external, that determine the economy of a country (inflation, interest rates, recession, economic cycle of a business). Everything that has to do with the increase or decrease of wealth (f luxury of cash, accumulated capital, the concentration of wealth, growth economic, and credit conditions) of a nation and its economic participants (organizations and individuals). Changes in the variables that make up the economic environment affect generally the purchasing power of consumers (Ulubeyli, Kazanci, Kazaz & Arslan, 2019). When designing the strategies of marketing is extremely important to take into account changes in the purchasing power of potential customers, therefore the importance of analyzing this medium.

Social Factors

This medium includes perceptions, beliefs, lifestyles, preferences, and values. of society at a given time, according to the culture that predominates in it. The socio-cultural variables of a region or country condition such as behaviors, attitudes, and decisions of the people should be considered especially in marketing since they influence the purchasing decisions of consumers (Ulubeyli et al., 2019). The socio-cultural environment has become a very important variable for the marketing, because it presents very rapid and drastic changes in regarding the behavior of members of a society (consumers of goods and services); Some examples of this are the severe changes they have caused, On the other hand, the marked tendency of the urban population to improve their health and physical appearance, which has caused the emergence of companies dedicated to production and marketing of exercise equipment, medications, special clothing, creams, specialized offices in diets and gyms has resulted to new business opportunity. On the other hand, the role of women in the labor and professional market has also changed in today's society, which has led to a whole series of new services for the care of children of working and single mothers, as well as centers for attention, coexistence, and associations of executive women. Finally, the rapid advance of technology and telecommunications creates universal behavior patterns (globalization), why world-class organizations are developing strategies in this item, taking advantage of the opportunity that exists in an open and globalized market (Ulubeyli et al., 2019).

Technology

Technology is considered as one of the strategic resources for organizations. any company that finds a better way to do something develops an advantage competitive; generating advances in the technology of an organization can help that it offers the market a satisfactory way faster, more economically, more durable or simply with higher quality. Here is the importance of considering what happens in the technological environment regarding marketing in the organization (Davids, Gullich, Shuttleworth & Araujo, 2017). Noteworthy is that when an innovation is made (in the aspect technology), it must be officially registered so that it is respected and protected the right of exclusivity of the brand or patent.

Ecological Factors

The natural resources that the international market requires, such as inputs that are affected by marketing activities, make up the ecological factor. In the 1990s the world began strong campaigns in favor of ecology and of caring for the environment, thinking about improving the quality of life of us and the future generations. Currently, people or people have penalized criminally and economically companies that damage their environment or that do not comply with the legislation in this area. Recent events of environmental pollution made us aware of how delicate the natural environment of which we are part and that will harm us greatly in case it is not given enough care (Davids et al., 2017).

DemographyDemographic factors refer to indicators of population, geographic location, gender, social class, income, age distribution, schooling, occupation, etc., which presents a region. It is very useful for marketing to know the market in demographic terms because it allows you to develop effective commercial programs. For example, the organization needs to know how the market is structured to design a product or service that meets your needs according to age or gender; another application would be toy market segmentation with a demographic approach by age, to assess your potential based on age and income (Davids et al., 2017).

Governmental Factors

The government environment is related to laws, regulations, and provisions formulated by the government to regulate and control the activities of organizations. Changes in this environment are reflected in official normative documents issued by the State. This type of document officially indicates what is due or not to do regarding the economic and commercial activities of the companies; that is to say, Legislation dictates or regulates, directly and indirectly, the marketing function of the companies (Ulubeyli et al., 2019). For example, a law should inform whether it is possible or should use comparative advertising, include product ingredients on labels; if it exists some norm that forces to certify a pharmaceutical product before launching it to the market among other things.

References

Barkauskas, V., Barkauskiene, K., & Jasinskas, E. (2015). Analysis of macro environmental factors influencing the development of rural tourism: Lithuanian case. Procedia-Social and Behavioral Sciences, 213, 167-172. Retrieved from https://www.sciencedirect.com/science/article/pii/S1877042815057687

Davids, K., Gullich, A., Shuttleworth, R., & Araujo, D. (2017). Understanding environmental and task constraints on talent development: Analysis of micro-structure of practice and macro-structure of development histories. In Routledge handbook of talent identification and development in sport (pp. 192-206). Routledge. Retrieved from https://www.taylorfrancis.com/books/e/9781315668017/chapters/10.4324/9781315668017-14

Ulubeyli, S., Kazanci, O., Kazaz, A., & Arslan, V. (2019). Strategic Factors Affecting Green Building Industry: A Macro-Environmental Analysis Using PESTEL Framework. Sakarya Universitesi Fen Bilimleri Enstitusu Dergisi, 23(6), 1042-1055. Retrieved from http://www.saujs.sakarya.edu.tr/tr/pub/saufenbilder/issue/44246/474824